Retailers blamed for rise in food prices

NEW DELHI:Commodity traders and suppliers, facing government pressure and raids over food inflation, say large retailers are the real culprits for rising food prices as they routinely make fat margins of up to 100% even in pulses, the common man's staple. Wholesale merchants and dealers say that given a chance they can sell pulses in the retail market at prices 40% lower than the prevailing level.

Retailers, on the other hand, say they sell pulses at stable prices, which helps consumers in the long run and that they don't revise their prices up or down every month. "Pulses manufacturer, importer and wholesaler are brought under scanner by government whereas it is the retailer who makes the maximum margin,"said Rakesh Jain, MD, Rajdhani Group a leading player in pulses in north India.

Traders cite many examples such as chana, which retails in Delhi for Rs 68 per kg, which is double the wholesale price. They say moong dal, which is being sold briskly in markets and mandis across Gujarat and Maharashtra was and is being quoted at Rs 70- 80 a kg in Ahmedabad market but in retail it was being sold at Rs 120-135 a kg. In Delhi's Naya Bazar wholesale market, a regional hub for pulses trade, the average price of chana dal was being quoted at Rs 34 a kg, moong dal at 72 a kg, urad at Rs 64 a kg and arhar at 62 a kg.

In retail the prices were at least 40% higher and in many cases more than double. The government ordered a series of steps including minimum export prices for potatoes and onions, crackdown on hoarding along with a suggestion to states that farmers should be allowed to sell to any customer instead of being forced to come to traders and middlemen in specified mandis. Concerns are mounting as food inflation is high and the monsoon has started very weakly in the crucial crop-planting month of June. Pulses importer and stockist Sunil Baldeva of Siliguri Associate at Naya Bazaar said the wholesale trade was being unfairly targeted.

"Rather than raiding traders premises the government should keep a check on all these huge retailers," he said. Given a chance, traders could sell pulses at 40% cheaper price than the prevailing retail rates. "Even if you count transportation, packaging, rental of store, salaries, moisture and quantity loss or cost of capital and margin it should not be more than Rs 15 a kg. This is not the case," said Baldeva. A leading pulses merchant who caters to leading retailers across the country said that he had to print higher MRP owing to competition from smaller companies.

"I will lose the business to smaller traders if I don't print 40-50% higher price on packaging than the rate at which I sell to them," he said. Mitesh Patel who processes and sells toor dal under the Lakshmi Toor dal brand in Gujarat and Maharashtra region sells the pulses for n Rs 66 a kg. In retail it sells for n Rs 85 a kg. "We have never seen retailers correcting prices.

They will only rise," he said. Retailers on the hand feel that prices in organised stores are stable. "It is not possible to change prices on a monthly basis. Our pricing is done looking at along term evaluation and we will not increase prices substantially," said an official of pan India retail chain.